President Barack Obama asked Congress for another $1.2 trillion in government borrowing authority, the third and final request under an August deal with lawmakers that averted a U.S. default.
The president’s notification to congressional leaders yesterday starts a 15-day countdown for lawmakers to consider and vote on a joint resolution disapproving of the increase.
Laena Fallon, a spokeswoman for Majority Leader Eric Cantor, a Virginia Republican, said the House is expected to vote on a resolution on Jan. 18. The Senate, where Democrats hold a majority, returns to work the following week.
Under legislation passed Aug. 2 after months of negotiating between the administration and Republican lawmakers, the president has authority to veto any disapproval resolution that clears both chambers of Congress.
While the request to raise the debt ceiling is a formality laid out in last year’s agreement, the national debt will play into the presidential campaign and congressional races that will be decided in November. After the economy and jobs, the federal deficit is among the top concerns mentioned by voters in polls.
A spokesman for House Speaker John Boehner used the request to criticize Obama on the budget and the deficit.
“This request is another reminder that the president has consistently punted on the tough choices needed to rein in the deficit and protect important programs for American seniors from going bankrupt,” Brendan Buck said in an e-mail.
The deficit in fiscal 2011 was $1.3 trillion and the White House budget office in September forecast it will be $956 billion in the current fiscal year.
Lawmakers rejected a proposal Obama made in September to trim the nation’s long-term deficit by $3 trillion beyond the $1 trillion that was agreed to as part of the deal to raise the debt ceiling. Obama plans to reprise those plans as part of his 2013 budget, administration officials said yesterday.
They include raising taxes on the wealthiest Americans, cuts in Medicare and reductions in so-called mandatory programs such as farm subsidies.
Even with the deficit, there was record demand for U.S. government bonds in 2011, pushing longer-maturity Treasuries to their best performance since 1995. While Standard & Poor’s stripped the U.S. of its AAA credit rating on Aug. 5 after a protracted standoff over the debt ceiling, Treasuries due in 10 years or more returned 29 percent last year.
The yield on the current 30-year bond rose one basis point, or 0.01 percentage point, to 2.97 percent at 5 p.m. in New York yesterday, according to Bloomberg Bond Trader prices. Ten-year yields rose two basis points to 1.92 percent.
The law calls for Obama to notify Congress when the debt came within $100 billion of the current $15.194 trillion limit.
While the threshold was reached Dec. 30, when the president was in Hawaii and Congress was on holiday break, Obama agreed to a request from congressional leaders to delay the debt notification, ensuring the deadline for congressional action didn’t lapse before lawmakers returned to Washington.
The debt ceiling increase is to meet commitments already made by the government. The Treasury Department has been relying on accounting maneuvers, similar to the ones employed during the year’s earlier dispute, to ensure that the previous $15.194 trillion limit wasn’t breached.
Since the budget law was approved, the debt limit has been raised twice, by a total of $900 billion. In the latest request, the limit would rise to $16.394 trillion, which the Treasury Department estimates will fund the government until late 2012.
In the last certification vote, the Republican-controlled House passed a resolution of disapproval, while the Senate didn’t.